Power sector in debt crisis

Islamabad: The power sector circular debt has reoccurred at huge level in the last six months, with the Ministry of Water and Power on Friday admitting that the debt, excluding that owed to oil companies, has reached Rs180 billion.

The government soon after assuming power cleared Rs480bn circular debt in the last week of July 2013.

However, senior officials of the National Transmission and Dispatch Company (NTDC) told the Senate Standing Committee on Water and Power that circular debt has surged again to Rs180bn.

“This does not include the amount to be paid to the state-owned oil-marketing company PSO,” Senator Zahid Khan, chairman of the committee said after reading the papers.

“The International Monetary Fund (IMF) also wants audit of entire stock of payable and receivables which is underway,” he told the committee.

The meeting was informed that out of total Rs487bn circular debt cleared by the government some six months back, Rs270bn was paid to IPPs and Rs37bn were paid in terms of interest payment.

The committee members expressed concern over performance of the power generators, from the top to end, starting from the ministry which has the role to oversee the performance of various entities.

The committee members inquired about the reasons of loss being faced by the power sector and sought break-up of the electricity generation, transmission, distribution and in the recovery of power bills.

The committee members also expressed skepticism that subsidy was not even being provided even on consumption of 25 units monthly.

The committee decided to seek detailed briefing from the senior official of NTDC, Pepco and Discos on Feb 18 and directed the official to come prepared with entire details.

It is concluded that Wapda needed to submit a revised PC-II for Munda Dam as cost has to be revised because of depreciation of rupee against dollar.